To ask how much I've fucked up? HMRC

OP, as a sole trader I urge you to keep on top of your accounting!, do not rely on accountants, it is quite easy to do most (if not all of it) yourself, especially with modern tools like accounting software.

You should always have a good idea of where you are in terms of gross & nett income, allowable expenses etc. This will stop the unexpected. Many self employed people like myself elect to cut off work in order not to tip into VAT territory, I tend to be off in Feb/March to avoid going over the limit.

Accounting for self assessment is actually pretty easy, I prepare all my own accounts for my accountant to check and then submit my return, knowledge of what's going in and out is key.

Look at your expenses in the year and make sure you are deducting everything you can, accountants can only work with what they are given, that means keeping every receipt for allowable expenditure.

This

Everyone blaming the accountant.... if the OP just hands over records once a year, accountants are not psychic and will assume current year is like previous unless told otherwise

Not much advice here other than to echo suggesting a better accountant. But congrats on doing so well with your business, amazing growth! 💪

You are quite correct, apologies yes he had to pay the child benefit back. Not sure about tax free childcare he didn't earn over 100k. A previous poster has said ticking the box is a guess at what you are expecting to earn so hopefully it will be fine based on she didn't earn that previously.

Best to contact hmrc to eg register for VAT before they contact you

OP is your company Limited (and you are a Director) or are you a sole trader?

If the latter then your drawings are irrelevant. You are taxed on the profit not drawings.

You're talking about child benefit not tax free childcare. Not the same thing.

OK, first don't panic.

If you've been making investments in the business, there's a good chance you will have less taxable profit than you think which will take care of the child are issue. You may also be to claim various allowances or exemptions, depending on what you do.

The two key things are:

• you are over the VAT rate on turnover (90k).
• you are over the limit for higher rate tax.

Since this is unexpected, you will probably have the reserves to cover the bill (and there are ways to negotiate repayments in arrears, if necessary). Moving forward, consider switching to a limited company and stay on top of your forecasting & cash flow with monthly reporting.

You will have to pay the tax free childcare back. Happened to my partner. I think now it's if you go over 80k you pay it all back, over 60 you pay some of it back until you earn over 80 and then you have to pay the whole lot back. He had to pay the whole lot back it was a few years ago and the threshold was 50k. Didn't even consider this as I earn hardly anything but it's based on a sole income not joint. Lesson learned. Like people have said put money in a pension, buy a van, keep a better eye on finances and expenses. Your accountant should suggest vat registration if your earnings have increased this much.

To be fair to the accountant we have no idea what the OP is telling them, unless they can see the bank account they may have no idea how much profit shes making

1. HMRC won’t give a shit you’ve earned over the threshold as long as you talk to them and pay whatever you owe.
2. You need a new accountant.
3. For goodness sake keep a closer handle on your business. Chances are that by muddling through you’re missing opportunities to be more efficient/make more money and sooner or later will come a cropper with HMRC or companies house by missing something.

The OP says that draft figures have already been prepared.

Your accountant has prepared a draft self-assessment return just one week after the tax year-end?

Blimey, that's a world first.

I’m a tax accountant and the tax free childcare thing is a non-issue. You mark the box for the next quarter based on what you ‘expect to earn’.

When your self employed profits are so exposed like this you should do a draft SE accounts/tax return start of March every year so you can make pension contributions/buy anything the business might need to control your profitability for a particular tax year to prevent these cliff edges like others have said.

The accounts and tax return can be easily finalised the next month and you have good foresight of the following January’s tax bill.

Impossible to tell.

The use of “profits” in the OP suggests costs have been deducted.

Get a better accountant. Put £30k minimum into your pension, then you're under the £100k you've told the childcare account about. Though, you might as well send over £48k, so once relief is added you max out 60k contributions, to lower tax.

Set up another bank account, transfer money across each month ear marked for the tax bill.

Not sure the investments can just be subtracted.

Anything you’ve bought for the business comes off your profits and is not taxable. Which your accountant should know. Or they are not an accountant!

Not if he hasn't seen her books for 24/25 yet. We're only six days into the new tax year.

@ohshit89 get the accountant to sort out the VAT registration and payment for you as a matter of urgency. Then ring fence income monthly for this and your income tax.

Good luck.

Really? You think that informal language means that posters don't know the basics?

Sounds like a shite accountant

You need a decent accountant to make sure you’re deducting all the expenses you are entitled to. You also need to register for VAT and pay any VAT you owe.

Once you’ve deducted the expenses and VAT, there’s a strong chance you’ll be under the £100k.

You should also consider becoming a Ltd company, it’ll be easier to shield yourself against any tax cliff edges.

Get ready for a huge tax bill next January, as you will no doubt need to pay a payment on account as you owe a lot more tax than you have paid in previous years. You will probably need to pay 150% of the tax you owe in Jan 26 and then another 50% in July 2026.